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Hello fellow investors and market watchers!
Today, we’re diving into the latest financial performance of SKP Resources Berhad, a prominent Electronics Manufacturing Services (EMS) provider listed on Bursa Malaysia. The company has just released its unaudited results for the fourth quarter and full financial year ended 31 March 2025. This report offers a compelling look at SKP Resources’ growth trajectory and its strategic maneuvers in a dynamic market environment.
The headline figures are certainly eye-catching: a significant increase in both quarterly and full-year revenue and profit. This robust performance underscores the Group’s ability to navigate market demands and expand its customer base, even amidst various operational challenges. Let’s break down the numbers and understand what’s driving SKP Resources forward.
Financial Performance Highlights: A Year of Growth
SKP Resources has delivered a strong set of results for both the current quarter and the full financial year. The Group’s ability to meet rising customer demand has translated into impressive top-line and bottom-line growth.
Fourth Quarter Performance (3 months ended 31 March 2025 vs. 31 March 2024)
The final quarter of the financial year saw a substantial uplift in performance:
Current Quarter (31 Mar 2025)
Revenue: RM578.3 million
Profit Before Tax: RM35.5 million
Profit After Tax: RM30.3 million
Earnings Per Share: 1.94 sen
Compared to (31 Mar 2024)
Revenue: RM447.7 million
Profit Before Tax: RM26.7 million
Profit After Tax: RM18.9 million
Earnings Per Share: 1.21 sen
Revenue surged by 29.2% to RM578.3 million, while Profit Before Tax jumped by 33.1%. The most significant increase was in Profit After Tax, which soared by 60.1% to RM30.3 million. This substantial growth in net profit also translated into a healthy rise in Earnings Per Share from 1.21 sen to 1.94 sen.
Full Financial Year Performance (12 months ended 31 March 2025 vs. 31 March 2024)
Looking at the full year, the growth story is equally compelling:
Current Year (31 Mar 2025)
Revenue: RM2,222.8 million
Profit Before Tax: RM151.4 million
Profit After Tax: RM118.6 million
Earnings Per Share: 7.59 sen
Compared to (31 Mar 2024)
Revenue: RM1,852.3 million
Profit Before Tax: RM120.1 million
Profit After Tax: RM91.0 million
Earnings Per Share: 5.82 sen
For the full financial year, SKP Resources’ revenue increased by 20.0% to RM2.22 billion. Profit Before Tax rose by 26.1%, and Profit After Tax saw a robust 30.3% increase, reaching RM118.6 million. This consistent growth across the board highlights the effectiveness of the Group’s operational strategies and its strong market position.
Quarter-on-Quarter Comparison (Q4 FY25 vs. Q3 FY25)
Comparing the latest quarter to the immediate preceding quarter (31 March 2025 vs. 31 December 2024) also shows positive momentum:
Current Quarter (31 Mar 2025)
Revenue: RM578.3 million
Profit Before Tax: RM35.5 million
Profit After Tax: RM30.3 million
Compared to (31 Dec 2024)
Revenue: RM503.7 million
Profit Before Tax: RM33.6 million
Profit After Tax: RM25.6 million
Revenue grew by 14.8% from the previous quarter, with Profit Before Tax increasing by 5.7% and Profit After Tax by 18.1%. The report notes that while new customer onboarding led to some start-up costs affecting profitability margins slightly, effective cost management strategies helped mitigate this impact, demonstrating the Group’s operational efficiency.
Balance Sheet and Cash Flow Snapshot
Beyond the income statement, SKP Resources’ financial health remains robust. As of 31 March 2025, Total Assets stood at RM1.45 billion, up from RM1.34 billion a year ago. Shareholders’ equity also improved to RM961.9 million from RM889.0 million, pushing Net Assets Per Share to RM0.62 from RM0.57.
From a cash flow perspective, the Group generated RM98.3 million from operating activities for the full year. While this is lower than the previous year, it’s important to note that investing activities saw a significantly reduced outflow (RM34.4 million compared to RM150.9 million last year), indicating a more focused approach to capital expenditure. Cash and cash equivalents at year-end were RM45.7 million.
Risks and Future Prospects: Navigating the Horizon
SKP Resources is not just resting on its laurels. The company is actively pursuing strategic initiatives to sustain its growth. It plans to continue expanding its Printed Circuit Board Assembly (PCBA), injection moulding, and engineering capabilities. This expansion aims to take advantage of a widened product assortment, indicating a proactive approach to capturing more market share and diversifying its offerings.
However, the report also highlights a key risk: a significant credit concentration risk arising from a major customer. This is a common challenge for EMS providers, and SKP Resources acknowledges this by stating its continuous efforts to diversify its customer base. This strategic diversification is crucial for long-term stability and reducing reliance on any single client.
The Board remains positive about the Group’s ability to sustain its resilience by maintaining a robust financial position at all times. This forward-looking statement, coupled with their expansion plans, suggests a confident outlook despite potential headwinds.
Dividends: A Note to Shareholders
For the financial year ended 31 March 2025, no interim dividend has been declared. However, SKP Resources has a stated dividend policy of a minimum 50% payout, subject to factors like distributable reserves, future cash flow, capital expenditure requirements, investment opportunities, regulatory restrictions, and market conditions. This policy indicates a commitment to shareholder returns when financial conditions permit.
Summary and Key Takeaways
SKP Resources Berhad has delivered a commendable financial performance for the fourth quarter and full financial year ended 31 March 2025. The significant growth in revenue and profit, both quarterly and annually, demonstrates the company’s operational strength and its ability to capitalize on increasing customer demand. The stable profitability margins, despite start-up costs for new customers, highlight effective cost management.
Key strengths include a healthy balance sheet and strategic initiatives to expand capabilities and product offerings. However, like any company, SKP Resources faces its set of challenges and risks. The primary focus for the Group moving forward will be:
- Continued expansion of PCBA, injection moulding, and engineering capabilities to broaden product assortment.
- Proactive efforts to diversify its customer base to mitigate credit concentration risk from a major customer.
- Maintaining a robust financial position to ensure sustained resilience in varying market conditions.
The Board’s positive outlook suggests that SKP Resources is well-positioned to navigate the upcoming period, building on its recent successes and addressing strategic priorities.
What are your thoughts on SKP Resources’ latest performance? Do you believe their strategy to diversify their customer base and expand capabilities will be enough to sustain this growth momentum in the coming years? Share your insights in the comments below!
For more in-depth analysis of Malaysian companies, stay tuned to our blog.
